Family Case (Tel Aviv) 31661-07-16 Anonymous v. Anonymous - part 2

The man did not accept my decision and filed a request for leave to appeal, which was rejected (see Family Appeals Authority 34913-07-23, published in Nevo, September 19, 2023).  With the rejection of the request for leave to appeal, the documents in question became part of the body of evidence for all intents and purposes.  After the request for leave to appeal was rejected, the man's summaries as well as the woman's response summaries were submitted.

13. Since the parties have heard before me at length, and in view of the protracted numerous proceedings before me and before the District Court and the Supreme Court, it can be said that this is a property saga of complexity. After all my attempts to bring the parties to an understanding that the judgment would become redundant did not succeed, and after an attempt to refer the parties to conciliation in this court also failed, the time is ripe to issue this judgment.
14. The arguments of the parties:
15. The following is a summary of the plaintiff's arguments:
16. The man is a prodigy in the field of finance and specializes in building mathematical derivatives, establishing and managing hedge funds, and providing financial advice for complex tax planning. His personal abilities have resulted in the creation of a fortune totaling over US$100,000,000.
17. The man's tremendous business success and the absolute trust that the woman placed in the man led to a division of roles between the parties so that the woman focused on managing the home environment, raising and nurturing the children of the parties, taking care of the man's needs so that the man could free himself undisturbed from his many financial affairs as well as his many absences from home in order to manage his business.

• The family's standard of living was extremely high and included luxurious residences, housekeepers, nannies, gardening services, luxury vehicles, vacations in the world's most luxurious tourist areas. The man used to give the woman expensive gifts such as a Rolex watch, luxury cars, etc.

1. The couple had a joint bank account in which the man deposited monthly sums of money intended to finance part of the family's expenses in accordance with the wife's credit card charges, and in an estimated amount of about ILS 70,000 per month. This is despite the fact that the total monthly expenses of the family are estimated by the wife at about ILS 200,000 per month, according to the details in paragraph 56 of the statement of claim.
2. The man was the one who managed the family's finances and property exclusively and without reservation and without sharing any information with the woman and in connection with his business. In fact, during the course of their life together, the wife had no accurate knowledge of the extent of the parties' assets, their nature or the manner in which they were held.  All this is even more so when the establishment of trust structures is the man's main occupation and expertise.
3. The parties purchased the lot on which the residence was built in 2004 and from their own money. Since the man was facing legal proceedings in the United States and in order to protect the property from the American tax authorities, the man preferred that the house be held through a trust - the defendant, and that it be registered only formally in the defendant's ownership.  Accordingly, a lease agreement was drawn up between the couple and the company at a monthly rent of US$1 per year.

• At the time of the crisis that broke out in the parties' relationship, the woman sought to trace the information regarding the parties' property, but all the information was kept with the man in a locked and closed room that the woman was forbidden to enter, and among other things, opening it required only the man's fingerprint and bypassing a security camera at the entrance. The man lived in the shadows under a heavy veil of secrecy.  His business, which is scattered all over the world, is run from a highly secure room, which is filmed by security cameras.
• From what became clear to the woman after the outbreak of the current crisis between the parties, the parties do not have any assets or property registered in the name of any of them, except by concealing the real ownership of the couple's assets in their registration in the names of companies and/or trusts and/or other entities in Israel and abroad that are under the sole control of the man, with the parties being the beneficiaries of all those assets. This fact confronts the woman with a dead end that could bring her financial disaster by leaving her with nothing until the end of her life together with the man.

1. The woman's life with the man was like living in a "golden cage," since the woman is completely dependent on the man on an economic level, and since the woman has difficulty in the Hebrew language, she has not been employed for about two decades and has no family member in Israel who could support her.
2. The woman has very partial information about the assets of the parties from very partial information that came to her at random during the course of their life together and during the better periods of the parties' relationship. This information is only the tip of the iceberg in the parties' property managed by the man, whose expertise is in hiding assets.
3. The man's financial and business success was made possible thanks to the full support of the woman, who stopped her professional development and took on the full burden of raising and caring for the home and children. As a result of the way the parties lived, a huge gap was created between the parties, and while the woman has no earning capacity, the man has a huge earning capacity that only grows during the marriage.  Therefore, the woman should be awarded periodic or one-time payment in light of the abysmal gaps between the parties.  Alternatively, the assets should be divided unequally and in order to create substantial equality between the parties and in accordance with the provisions of section 8(2) of the Property Relations Law.
4. In light of all of the above, the plaintiff petitioned for the following main remedies: entitlement to half of each right of the person and/or the company; entitlement to half of the rights in the residence; Partnership in all the rights accumulated during the marriage; dissolve the partnership in the residence; compensate it by means of a one-time payment or periodic payments, and alternatively, determine an unequal division of the tangible assets in order to compensate the woman for the balance of the assets of the economic reserve and the gaps in earning capacity between the parties.
5. The following is a summary of the defendant's arguments:
6. The lawsuit was filed together with remedies derived from the Property Relations between Spouses Law, while the parties were married in the state of New York in the United States. Since the parties' place of residence at the time of their marriage was in New York, the law applicable in the circumstances of the case is the law of the State of New York.  Since the plaintiff did not elaborate and did not argue in this matter, despite the burden placed before her, the statement of claim does not disclose a cause of action.
7. The lawsuit was filed in bad faith, since most of the parties' property is registered in the ownership of the woman and is estimated by the man in the amount of several million dollars (see para. 25 of the defense).

• The property registered in the woman's name is the only property that the parties were able to "save" after paying a $10 million fine imposed on the man in the criminal proceeding in 2007. In addition, the parties paid $15 million in legal expenses in proceedings against the man in the United States.

1. The family's expenses in the joint life were financed by money in the woman's accounts in the United States and Switzerland, apart from which there was nothing. After the crisis broke out between the parties and the woman left the house, the man was forced to take loans from friends in order to finance his livelihood.
2. No one has the ability to earn a living and has no ability to work; There is no body or financial institution that will agree to employ the man as a financial advisor given his conviction, and therefore today the man earns mainly from providing consulting services for immaterial sums. The man's earning capacity is immeasurably far from what the woman is trying to attribute to him.
3. The woman has a high earning capacity, since at the time of the parties' acquaintance, the woman worked in one of the most prestigious departments in one of the largest investment banks in the world. The plaintiff also served as a vice president at Merrill Lynch Bank in the United States and her earnings were over US$500,000 per year.

• The man does not have all the documents that were in the parties' home, since they were concealed by the woman when she left the house in the middle of the night - two days before the filing of the claim. Moreover, some of the documents are not in the man's possession, since they relate to the property of the parties that is managed by the woman and controlled by her alone.
• The claim that the woman was forced to leave the residence in the middle of the night is unfounded, since already in 2008 the woman decided to divorce the man and each of the parties had already contacted a lawyer on his behalf; Already in June 2016, the woman signed a rental agreement in the apartment to which she moved; sold jewelry and vehicles for which it received only its own hands; Thus, the entire process of filing the lawsuit, as well as the filing of requests for temporary relief, such as the Anton Piller Order, is nothing but the result of the woman's planning.

1. The residence belongs to the defendant only and the couple has no other proprietary and/or other rights, directly or indirectly, in connection with the house. The spouses are not the shareholders, directly or indirectly, in the company, and neither of them has any status in the foreign corporation.  The defendant was established by the defendant, but it is an irrevocable trust that cannot be amended or changed by the creator of the trust.  From the moment the trust letter was signed, the defendant as the creator of the trust effectively dissolved his ownership of the assets transferred to the trust and has no control over the trustees.
2. The residence was built from funds from the Alaska Trust and not from funds belonging to the parties or any of them.
3. The law that applies in relation to the defendant is the law in Guernsey and the jurisdiction in all matters relating to the trust assets is vested in the competent court in Guernsey.

• The plaintiff must be obligated to bear half of the debts and loans accumulated by the parties during their marriage, and not only to order sharing of rights.
• No one has any shares and/or holdings in the companies mentioned in the statement of claim, except for the full share capital of CC Consulting Services and minority shares in DD Company, which do not generate any income or profit for him.
• The management of the joint funds is done jointly by the couple or by the plaintiff herself without the defendant's involvement. The plaintiff had all the information regarding the joint rights.  The plaintiff even entered the defendant's study and effectively emptied it of its contents, while stealing many documents of the defendant as well as other items.

1. The defendant has nothing to hide and agrees to the issuance of an order for disclosure of information, provided that the order is reciprocal (paragraph 183 of the statement of defense).
2. In light of his claims, the man petitioned the court to order as follows: to reject the plaintiff's petitions and to rule on the parties' property matters in accordance with his claims. This includes the application of foreign law, which is the law that applies to the place of residence of the parties at the time of their marriage, as well as the foreign laws according to the various letters of trust.
3. As stated above, in the decision of November 18, 2018, the defendant was joined as a party to the proceeding, and on February 4, 2019, the statement of defense was filed on behalf of the defendant. The following is a summary of the defendant's arguments:
4. The defendant is a foreign company, incorporated in the British Virgin Islands. Its place of residence and the place of residence of its shareholders and officers is not in Israel.  The company was formed by an irrevocable foreign trust called the Alaska Trust in 2002.
5. Since the date of the company's inception, it has been managed by trustees who are subject to the provisions and guidelines of Alaska, which controls the defendant 100%. Alaska was established by the defendant, the man, but the woman knew about it and agreed to transfer funds from various trusts to the Alaska Trust with the understanding that the funds transferred to the Alaska Trust belonged to the defendant alone.

• The essence of a company is the establishment, liquidation and management of companies and trusts in various jurisdictions. The land on which the residence was built was purchased by the defendant, the costs of building the house were financed by the defendant and therefore the property is property in the defendant's name only.

1. All of the plaintiff's claims regarding the ownership of any of the spouses in the residence by virtue of judicial estoppel should be rejected outright, since even in a proceeding that took place in the Magistrate's Court, the plaintiff claimed that she was not the owner of the residence (see paragraph 129 of the statement of defense).
2. The couple has no current control or right in the defendant which is wholly controlled by the Alaska Trust.
3. THE PLAINTIFF ADMITTED AND SIGNED THAT SHE RECOGNIZED THE ALASKA TRUST AND RECOGNIZED THAT THE FUNDS TRANSFERRED TO THE TRUST WERE THE MAN'S MONEY ONLY, WHICH WAS TRANSFERRED BY HIM FROM ANOTHER TRUST (EEEE TRUST).

• All documents signed by the plaintiff regarding the lack of rights in the Alaska trust and/or in any company controlled by Alaska were signed by the plaintiff out of her understanding or knowledge of the law as well as the significance of each and every document.
• The Israeli court is an inappropriate forum to hear a lawsuit regarding the residence owned by the company, when the law applicable in the matter is the law in Guernsey. This is also in light of a unique and explicit jurisdiction stipulation that unequivocally defines the courts that will have jurisdiction over the affairs of the Alaska Trust and its assets, to which the plaintiff is a signatory.

1. The claim was filed in the absence of cause and/or lack of rivalry between the plaintiff and the company controlled by the Alaska Trust and under the laws of Guernsey only.
2. Since no partnership between the plaintiff and anyone in the property has been proven, the remedies requested in the statement of claim in relation to the property, such as the dissolution of the partnership in the real estate, should not be ordered.

3 - Discussion: